Thermax India Posts Its Q1FY14 Results

Here is another Capital Goods company posting a decline in its financial this quarter. Thermax India (TIL) today (July 25) announced its first quarter results wherein it has posted a total income of Rs 862.82 crore in Q1FY14, 12% lower than Rs 983.47 crore of the last year’s corresponding quarter. The company posted a net profit of Rs 50.25 crore for the quarter, against Rs 67.42 crore in Q1FY13, a 25% decline.

The company posted revenues o f Rs 633.86 crore under its Energy segment, 17% lower than that in the corresponding period of the last year. The Environment segment posted revenues of Rs 239.71 crore in this quarter. The Energy segment contributes almost 73% to the company's overall revenues. Further, the margins under this segment have improved to 11.55% in Q1FY14 from 10.74% cent in Q1FY13 and 10.45% in Q4FY13.

The company's EBITDA stood at Rs 81.42 crore in Q1FY14 against Rs 96.40 crore in Q1FY13, a decline of 15.54%. However, the EBITDA margins for the quarter stood at 9.44%, almost similar to those of Q1FY13. The most interesting part was that the company's interest cost decreased by almost 79% as compared to the corresponding period of the last fiscal. Despite this, the company’s net profit showed a 25% decline due to a considerable decline of 56% in its Other Income. It stood at Rs 8.14 crore in Q1FY14 against Rs 18.70 crore in Q1FY13.

During this quarter, the company bagged a prestigious order worth Rs 1700 crore from a petrochemical company at 2 of its plants. In the first quarter of FY14, the company registered an order book of Rs 2123 crore, a considerable growth of 68% as compared to Rs 1258 crore in the corresponding period of the last fiscal. The company's order balance as on June 30, 2013 stood at Rs 5530 crore, with a 24% growth against Rs 4474 for the corresponding quarter of FY13.

The increase in the order book may be positive for the stock today as the scrip is up by almost 2% despite unsatisfactory results for first quarter. We recommend that investors hold the stock with no fresh exposure for the next couple of quarters.